sale process

Mercy arranging tours for potential bidders in its bankruptcy sale


Mercy Iowa City is shown Aug. 7 in Iowa City. in Iowa City,. The hospital, now in bankruptcy, has arranged tours of its health care facilities next week for potential bidders interested in competing for its assets against the University of Iowa. (Jim Slosiarek/The Gazette)
Mercy Iowa City is shown Aug. 7 in Iowa City. in Iowa City. The hospital, now in bankruptcy, has arranged tours of its health care facilities next week for potential bidders interested in competing for its assets against the University of Iowa. (Jim Slosiarek/The Gazette)

IOWA CITY — Mercy Iowa City has arranged tours of its health care facilities next week for potential bidders interested in competing for its assets against the University of Iowa — which last month made an initial “stalking horse” bid of $20 million to buy the 150-year-old community hospital.

During a hearing Wednesday in U.S. Bankruptcy Court — following Mercy’s Aug. 7 filing for Chapter 11 protection — attorney Felicia Perlman, representing Mercy through her Chicago firm, McDermott Will & Emery, said, “We do have several parties who have signed (nondisclosure agreements) and are active in the data room, and we are providing diligence to and these tours for.”

“We’ll know more whether they are likely to be real bidders or whether they lose interest,” Perlman told Judge Thad Collins in response to his request for a status update.

She reported active recruitment and outreach to any individuals or entities that have expressed interest.

“We

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September 18, 2023 by ATTORNEY

Bondholders, bankruptcy trustee seek slowdown in Mercy hospital sale


Signs direct Mercy Iowa City patients to areas in the hospital, which may be sold to the University of Iowa. The hospital’s bondholders and creditors, however, asked a judge this week to slow down the sale to give them time for due diligence and to maximize the “value of the sale.” (Jim Slosiarek/The Gazette)
Signs direct Mercy Iowa City patients to areas in the hospital, which may be sold to the University of Iowa. The hospital’s bondholders and creditors, however, asked a judge this week to slow down the sale to give them time for due diligence and to maximize the “value of the sale.” (Jim Slosiarek/The Gazette)

IOWA CITY — Although Mercy Iowa City wants an expeditious sale of its assets — after the 150-year-old hospital filed for Chapter 11 bankruptcy this month — its bondholders and creditors this week asked a judge to tap the brakes to give them time for due diligence and to maximize the “value of the sale.”

“(Mercy’s) proposed bidding procedures are premised upon an exceptionally abridged timeline,” the hospital’s primary bondholders argued in court filings Thursday, referencing Mercy’s request for a Sept. 19 deadline for other bids to compete with the University of Iowa’s $20 million opening offer.

“The timeline under the proposed bid procedures is so compressed that it could potentially deter interested parties from participating in the sale process and have a chilling effect.”

Chief Judge Thad Collins on Friday agreed to move a hearing on the timeline and sale process from Aug. 31 to

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August 28, 2023 by ATTORNEY

Yellow’s Bankruptcy Will Test Obligation to Teamsters Contract

The anticipated bankruptcy of trucking giant Yellow Corp. stands to have a major impact on collective bargaining agreements that cover roughly 22,000 workers, offering a chance to test when union contracts can survive insolvency proceedings.

Bankruptcy law contains provisions that arguably give unions more leverage to fight to keep their contracts in place as the company decides how to pay creditors, reorganize, or wind-down. Businesses, for example, generally face a higher bar to reject a bargaining agreement during a Chapter 11 proceeding than some other types of contracts.

Those measures will likely come into play between Yellow and the Teamsters, which represents a large swath of the company’s 30,000 workers. The union threatened to go on strike last month after the company initially failed to make a $50 million payment for employee benefits.

On Monday, the union said it was served with a legal notice that the Nashville, Tenn.-based company is ceasing operations and liquidating.

Teamsters General President Sean M. O’Brien called the news “unfortunate but not surprising.”

“Yellow has historically proven that it could not manage itself despite billions of dollars in worker concessions and hundreds of millions in bailout funding from the federal government,” O’Brien said.

In June,

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August 8, 2023 by ATTORNEY

How Bed Bath & Beyond is hedging its bankruptcy bet

Bed Bath & Beyond (BBBY) is hedging its bankruptcy bets, simultaneously posturing for a wind down while also vying to stay in business.

The dual-track strategy emerged Sunday as the home goods retailer filed for protection of its assets under Chapter 11 of the US Bankruptcy Code.

A Chapter 11 filing typically helps financially distressed companies work out a plan with their creditors to reorganize debt and emerge as a viable entity. But Bed Bath & Beyond announced it would focus on liquidating assets, a path typically pursued as part of a Chapter 7 bankruptcy.

The failed housewares chain said the dual-track strategy was the best way to maximize value for stakeholders. A press release stated it had already initiated a liquidation sale, though would conduct a limited marketing process to solicit interest in some or all of its assets.

“In the event of a successful sale, the company will pivot away from any store closings needed to implement a transaction,” the company said.

Other distressed companies have taken a similar path. David’s Bridal, which filed for Chapter 11 protection on April 17, also elected for a dual-track sale-liquidation process. And retailer Toys R Us similarly chose

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April 29, 2023 by ATTORNEY
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